AD HOC Shrimp Trade Action Comm. v. United States

• Decision Date: 05 June 2015
• Docket Number: Slip Op. 15–53.,Court No. 13–00346.
• Citation: 70 F.Supp.3d 1328
• Parties: AD HOC SHRIMP TRADE ACTION COMMITTEE, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

70 F.Supp.3d 1328

AD HOC SHRIMP TRADE ACTION COMMITTEE, Plaintiff

v.UNITED STATES, Defendant.

Slip Op. 15–53.

Court No. 13–00346.

United States Court of International Trade.

June 5, 2015.

Andrew W. Kentz, Jordan C. Kahn, and Nathaniel Maandig Rickard, Picard Kentz & Rowe LLP, of Washington, DC, for the Plaintiff.

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the Defendant. Also on the brief were Joyce R. Branda, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Melissa M. Brewer, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

OPINION and ORDER

POGUE, Senior Judge:

This action arises from the seventh administrative review by the U.S. Department of Commerce (“Commerce”) of the antidumping duty (“AD”) order on certain frozen warmwater shrimp from the People's Republic of China (“PRC” or “China”).¹ In this review, Commerce determined to revoke the order with respect to respondent Zhanjiang Regal Integrated Marine Resources Company, Limited (“Regal”).² Appealing Commerce's determination, Plaintiff Ad Hoc Shrimp Trade Action Committee (“AHSTAC”)—an association of domestic warmwater shrimp producers that participated in this review³ —claims that Commerce's revocation was in error.⁴ Specifically, AHSTAC challenges (1) Commerce's reliance, in concluding that Regal was eligible for company-specific revocation, on data and analysis that were previously held not to have been based on a reasonable reading of the record evidence because, inter alia, the agency arbitrarily ignored economic comparability in its evaluation of factor of production data; and (2) Commerce's determination to disregard discrepancies between Regal's verified sales data and the entry information provided by U.S. importers in concluding that the continued application of the AD order to Regal's merchandise was not necessary to offset dumping.⁵

The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012),⁶ and 28 U.S.C. § 1581(c) (2012).

As explained below, Commerce's reliance, without reconsideration or additional explanation, on data and analysis from the fifth review of this AD order—despite this Court's prior holding that these same determinations were not based on a reasonable reading of record evidence, and despite material differences between the record of that proceeding and this revocation inquiry—is remanded for reconsideration. On the other hand, Commerce's decision to disregard any discrepancy between Regal's verified sales data and the entry information provided by importers was reasonable, and is therefore sustained.

BACKGROUND

Antidumping duty orders are imposed on imported merchandise that is sold at prices below normal value (i.e., “dumped”), where “normal value” is usually the price at which like products are sold in the exporting country or, for merchandise originating in non-market economies (“NMEs”), a value calculated using appropriate surrogate market economy data.⁷ Such orders are regularly reviewed by Commerce, such that the agency determines producer/exporter-specific dumping margins, covering discrete (typically one-year) time periods, by making contemporaneous normal value to export price comparisons.⁸ Pursuant to a regulation in effect at the time of the administrative review at issue here, Commerce was authorized to revoke the AD order with respect to particular exporters/producers after considering whether (A) such an exporter/producer had “sold the merchandise at not less than normal value for a period of at least three consecutive years”; (B) such exporter/producer (if previously determined to have sold the merchandise at less than normal value) “agrees in writing to its immediate reinstatement in the order, as long as any exporter or producer is subject to the order, if [Commerce] concludes that the exporter or producer, subsequent to the revocation, sold the subject merchandise at less than normal value”; and (C) whether “the continued application of the antidumping duty order is otherwise necessary to offset dumping.”⁹

Pursuant to this regulation, Regal requested company-specific revocation, citing its zero percent dumping margins in the fourth and fifth administrative reviews (and its expected zero percent dumping margins in the sixth and seventh reviews), and certifying in writing its agreement to its immediate reinstatement under the order should Commerce determine in the future that Regal is selling subject merchandise to the United States at prices below normal value.¹⁰ By the time of Commerce's decision regarding this revocation request, Regal had been individually examined in the sixth and seventh reviews, and received zero percent dumping margins in both proceedings.¹¹ Regal was not, however, individually examined in the fifth review,¹² in which it was assigned a zero percent dumping margin based on its individually-calculated zero percent rate in the previous (fourth) review.¹³ Because Regal was not individually examined in the fifth review, Commerce requested from Regal information and sales data from the time period covered by that review, “to confirm that Regal did not dump during that time,”¹⁴ and hence to confirm that Regal did not dump for three consecutive years, as required for revocation eligibility under the regulation.¹⁵ Finding that Regal's fifth review sales data confirmed that Regal did not sell subject merchandise at less than the normal values calculated during that proceeding, Commerce concluded that Regal satisfied this regulatory requirement.¹⁶ As explained below, AHSTAC now challenges this finding in so far as it relies, without additional analysis, on comparison values from the fifth review that were held by this Court to require reconsideration.¹⁷

AHSTAC's first challenge is directed at Commerce's decision to compare Regal's sales data for the period covered by the fifth administrative review¹⁸ with the normal values calculated during that proceeding.¹⁹ Because Commerce considers China to be a non-market economy, these normal values were based on “the value of the factors of production utilized in producing the merchandise,” including “an amount for general expenses and profit plus the cost of containers, coverings, and other expenses” (collectively, the “FOPs”), in a surrogate market economy country.²⁰ Commerce's selection of the primary surrogate country for the fifth review period was successfully challenged by AHSTAC in that original proceeding.²¹ Now AHSTAC again challenges this same determination, as reiterated in the context of Commerce's examination of Regal's fifth review prices, as part of the agency's evaluation of Regal's revocation request.²²

Specifically, in the original fifth review, Commerce used Indian data to value the FOPs for its normal value calculation.²³ AHSTAC challenged this decision, arguing that record data from Thailand, rather than India, provided the best available information for the normal value calculation.²⁴ Responding to AHSTAC's challenge, this Court remanded Commerce's determination to use Indian surrogate data in the fifth review, “[b]ecause Commerce's stated reasoning regarding the surrogate country selection in this review does not comport with a reasonable reading of the record.”²⁵ On remand, however, the question was rendered moot when the sole individually-examined respondent was found to be non-credible and uncooperative, and accordingly was assigned, based on adverse facts available,²⁶ a rate derived from the domestic industry's petition to impose this AD order.²⁷ “As a result, [Commerce] did not ... reexamine the issue of surrogate country selection” in the fifth review, and then subsequently continued to rely on the same surrogate FOP values in examining Regal's fifth review pricing as part of its revocation analysis.²⁸ AHSTAC now challenges Commerce's determination to continue to rely, without any additional consideration or explanation, on surrogate FOP values that were previously held to have been inadequate when considered in light of other record evidence.²⁹

In addition, AHSTAC challenges Commerce's determination that “the continued application of the order is not otherwise necessary to offset dumping.”³⁰ Specifically, AHSTAC argues that a discrepancy between the volume of entries identified by U.S. importers as Regal's subject merchandise and the volume of such shipments revealed in Regal's own data reflects a “chronic concern with respect to Regal's subject merchandise being incorrectly entered ... throughout the three-year revocation period.”³¹ AHSTAC claims that this discrepancy is evidence indicating that the continued application of the order with respect to Regal remains necessary.³²

Following a statement of the relevant standard of review, each challenge is addressed in turn.

STANDARD OF REVIEW

The court upholds Commerce's antidumping determinations if they are in accordance with law and supported by substantial evidence. 19 U.S.C. § 1516a(b)(1)(B)(i). Where, as here, the antidumping statute does not directly address the question before the agency, the court will defer to Commerce's construction of its authority if it is reasonable. Timken Co. v. United States, 354 F.3d 1334, 1342 (Fed.Cir.2004) (relying on Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842–43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) ). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion,” Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938), and the substantial evidence standard of review “can be translated roughly to mean ‘is [the determination] unreasonable?’ ” Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 ...